Life insurance companies could use iPhone apps to calculate rates
October 8, 2014 by Julie Campbell
Speculations are swirling about the use of data from health and fitness applications by insurers.
As apps and gadgets focused on health and fitness tracking become increasingly popular, many are beginning to speculate that these tools could provide the life insurance industry with valuable data for determining the rates that they are charging individual consumers.
In an idea that is similar to usage based auto insurance, iPhones could measure actual policyholder risk levels.
Among the elements that have been introduced to the new mobile operating system from Apple is one that gives developers the opportunity to create apps that measure factors such as blood pressure, heart rate, weight, and sleep. This data can be sent from the device user to his or her doctor if they choose to do so. This can help to give doctors a better idea of the user’s overall habits and biorhythms so that decisions aren’t made exclusively on measures within the doctor’s office. That said, this information could also be invaluable to life insurance companies that are seeking to obtain a more accurate idea of the healthy lifestyles of their policyholders, in order to be able to calculate rates that more accurately reflect their risks.
Life insurance companies are not subject to the same regulations as health insurers in this regard.
The Affordable Care Act does not allow health insurance companies to use information based on pre-existing conditions to deny a consumer coverage or to charge exorbitant rates to those individuals. However, for life insurers – who use medical records specifically to calculate the risk associated with a given customer – this is an entirely different situation.
These insurance companies want to be able to gain access to all of the practical data that is available in order to make an informed decision regarding the rates charged to a specific customer. Therefore, while the companies currently use factors such as age, occupation, medical history, and whether or not the individual smokes – for instance – more specific data that could be collected from the day to day lives and activities of the customer could provide life insurance companies with an even better idea of the types of risks to an individual’s health.
